Vaquero-2 started flowing on August 1 and reached the equivalent rate of two million standard cubic feet of gas per day before fraccing.

Following fraccing, it was now producing about 3.25 million cubic feet of gas equivalent with 1,900 psi flowing tubing pressure, FAR said.

This total comprised 2.9 million cubic feet per day of natural gas and 57 barrels per day of condensate.

Drilled to a total depth of 3749 metres, the well is producing from the Middle Wilcox formation.

"Dune anticipates drilling additional deep, high impact anomalies on our Welder Ranch acreage in 2006 which we have identified utilizing reprocessed 3D seismic, as well as shallower low risk targets," Dune chairman and CEO Alan Gaines said.

Dune Energy holds a 51.9% net working interest in the Vaquero-1 and 2 wells, located in an area of mutual interest in the Welder Ranch lease.

FAR farmed-in to earn a 9% working interest in both Vaquero wells and later increased its interest in the Vaquero-1 well to about 9.69%.